Co-authored by Andy Hoffman and Ellen Hughes-Cromwick
It’s no small irony, then, that on the same day his research shared in the Nobel Memorial Prize in Economic Sciences, a United Nations panel released its latest report on the mounting dangers of climate change. In fact, the report builds upon much of Nordhaus’ work and warns that we have only about a dozen years to keep temperatures below 1.5 degrees Celsius to avoid environmental catastrophe.
This warning – and the award – come at a time when it appears that some Americans are not listening. The U.S. is no longer a signatory of the Paris accord to address climate change, a broad swath of the country still denies the existence of the problem, and some state and federal policymakers don’t incorporate climate science into their decision-making.
But Nordhaus’ work is not about whether or not people and policymakers “believe” in climate change. It’s about the market and its ability to address the most serious issue facing humanity in the coming years.
As scholars of economics and management who are passionate about finding smart solutions to the challenge of a changing climate, we believe his research offers hope that humans can still prevent global calamity.
The economics of climate change
One of Nordhaus’ most significant contributions was perhaps his ability to unpack and explain the complex issues surrounding climate change.
In “Climate Casino,” for example, Nordhaus explained the many interrelated topics when talking about climate change, from science and energy to economics and politics, while clearly identifying the steps necessary to prevent catastrophe. Or as The New York Times put it, “It is a one-stop source on global warming, seen through the prism of a brilliant economist.”
Although his writing was accessible, he showed that he was still grappling with the uncertainty of his and other projections, allowing us to see the honest complexity of outcomes related to how humans harm the environment through greenhouse gas emissions.
A premise of his research was that the environment is a public good, shared by all and yet not paid for in any adequate or appropriate way.
In other words, we all benefit from it, though we don’t necessarily pay for it. And we are all harmed by its degradation though the value of that damage is not captured in standard market exchange.
Read the article in The Conversation here.
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KEYWORDS: The Conversation, Andy Hoffman, Ellen Hughes-Cromwick, William Nordhaus, Nobel Memorial Prize in Economic Sciences, Capitalism, Market Transformation, Erb Institute, university of michigan, Economics